The Innovation Matrix Reloaded, Again


I’ve continued to test out the ideas behind The Innovation Matrix with senior managers, and it seems to be working its way towards becoming a useful tool. As I do this, it continues to evolve.

Today, I am going to revisit The Innovation Matrix as a broad concept, then over the next couple of weeks I will add posts that talk about each component specifically. This added detail should help to flesh out the tool.

Here is the latest version of The Innovation Matrix:

This is a bit of a distillation of observations over time.  I thought of it because I think that a lot of people that are trying to improve innovation within an organisation think that they can go from the bottom left (No Innovation Capability) to the top right (World Class Innovator) in one jump, simply by introducing some sort of innovation program.

This is impossible – you actually have to make the trip in a number of steps, and there are many different paths that you can take.

The table has two increasing dimensions.  Across the horizontal axis there is increasing Innovation Commitment.  This can include things like talking about how innovation is important, including it as a core value, putting in systems to support and improve innovation, and explicitly earmarking time, money and other resources to innovation. This is measuring innovation inputs. You can also think of this as top-down innovation initiatives.

Going up the vertical axis shows an increase in Innovation Competence – mainly the ability to generate and successfully execute new ideas. This can include things like the actual number and nature of innovations that are implemented, the organisation’s effectiveness across all phases of the idea management process, the breadth of innovations, and outputs across an innovation portfolio. This measures innovation outputs – and it is all about execution.

Here is a brief description of each box:

  1. Not Innovating Very Much: these firms don’t innovate.  This isn’t necessarily bad – there’s no value judgment being made. They can be successful if they have strong positions in stable industries, or they can be average performers or struggling in other circumstances.  I think we can probably all think of examples for this category.
  2. Thinking About Innovation: firms in this category are starting to talk about the importance of innovation.  They might add it to their list of core values, or have a CEO that is starting to talk it up.  Regardless of this increase in awareness and commitment, they are still not very good at it.  This is often the first step that organisations take in trying to improve innovation.
  3. Bewildered: the primary features of firms here are confusion and frustration.  They are talking the talk, with official innovation programs, commitment of time and resources, etc.  But they’re still lousy at actually executing ideas.  They may have an excessive focus on ideation, a bad selection process, or just not be very good at executing.
  4. Accidental Innovators: These would be firms that innovate under some other name – so they might be really good at process innovations through a continuous improvement or lean program.  They are able to execute ideas reasonably well, but they don’t have any structure in place to support it, nor do they think that they’re innovative. They innovate through stealth. Many startups operate in this space too.
  5. Fit for Purpose: these firms have some structure in place to support innovation, and they are getting better at doing it. In many industries, this is the baseline level of innovation needed to stay in the game over the long run. Several firms that I work with have gotten to this level after moving first to Talking About Innovation.
  6. Potential Stars: these firms are good at innovating, and they are putting more resources into getting better at it.  They have top-level commitment to innovation, good processes in place, and dedicated resources for innovation.  They are reasonably good at executing new ideas and have the potential to become extremely good.
  7. Unicorns: the problem with making a matrix is that you have to put something into every box, even if it’s mythical.
  8. Stars (at risk): this might seem like the perfect place to be – very good at executing new ideas, but with less structure. These firms aren’t sinking huge amounts of resources into the process, but they are consciously trying to innovate. The risk is that because they lack full commitment to innovation, it might not become systematized, and their performance could drop.
  9. World Class Innovators: another self-explanatory category. In these firms innovation is deeply embedded in the culture – everything is oriented around innovation. Think Google, Apple, 3M, Procter & Gamble etc.

How to use this:

Here are some things that I think we can do with this:

  • Use it to make a better model of how firms improve at innovation:  Many of the people I work with are in firms towards the bottom left, and many of the examples that we use to illustrate points are from firms in the top right (Google, P&G, 3M, etc.).  This might be too big a conceptual jump. Not every firm can get to the top right, and neither should every firm aim to. It is more productive to think of this as an incremental process of steps, rather than one big jump.
  • Track the evolution of firms: we can learn about how to best manage innovation by tracking how firms progress through this matrix.  For example, one firm I work with started by Not Innovating Very Much, then started talking about it and moved to Thinking About Innovation, and now that they are getting better at it they are Fit for Purpose. Tracking these trajectories will give us a better idea of which paths work, and which are riskier.  See the case study links at the bottom of this post for examples.
  • Realise that there are multiple targets to shoot for: Like I said, not every organisation can be Google. Thinking about innovation with this matrix, you can see that all of the categories in the top row are excellent at innovation. However, the farther you go to the right, the more resources you have to commit to build and maintain this level of excellence. There are many situations where you can try to be an excellent innovator with a more bottom-up, less resource-intensive system in place. Also, there are many cases where it is fine to be Fit for Purpose. Your differentiation doesn’t come directly from innovation, so you just need to be good enough.
  • Think About the Best Path to Follow: Almost everyone starts by increasing commitment.  The danger with this is that you can end up Bewildered.  I wonder if we should be figuring out ways to improve capability rather than commitment.  Or is this even possible? It’s an interesting question, and you can certainly make a strong argument in favour of increasing capability before you increase how much you talk about innovating.

The main point with The Innovation Matrix is that improving your innovation performance is a journey of many steps, not simply one big leap. The matrix is designed to help us think about this more accurately, and to be more successful at improving our innovation performance.

If you have any thoughts on this, we’d love to hear them.

Case Studies:

Student and teacher of innovation - University of Queensland Business School - links to academic papers, twitter, and so on can be found here.

Please note: I reserve the right to delete comments that are offensive or off-topic.

44 thoughts on “The Innovation Matrix Reloaded, Again

  1. Tim,

    For sufficiently large organisations, innovation is not evenly distributed. So depending on where/who you ask, you will get a different assessment and therefore, a different box in the matrix. Question is: should the whole organisation be in the same box? If not, what strategy to adopt to bring the organisation as a whole to the desired level.
    Finally, is it possible to leverage the different parts of the organisation to work together and exchange ideas on how they arrived to the box they are. It seems to me that this “differential analysis” is the most promising way to develop an organic plan that takes into account local factors.

  2. Good points Marco, and almost certainly true. I’ll give it some thought, because that’s an angle that I haven’t considered yet as much as I should. Thanks for bringing it up!

  3. An interesting representation of the innovation landscape. At first, I was a bit put off by a 3×3 (vs. 2×2) matrix, but in reading the post I can see the logic and wisdom in staking out some middle grounds.

    Your reference to “not every firm can be Google” brought to mind a recent blog post by James Whitaker Why I Left Google, which is consistent with other things I’ve read or heard elsewhere, suggesting that even Google can’t always be Google.

    This also suggests – to me – the cyclical nature of innovation, along the lines of Tim O’Reilly’s insight that open and closed are in a great dance. I suspect that the more a firm excels at execution, the more challenging it is to faithfully promote innovation, in part because the dark side of success is that there is more to lose.

    Simon Wardley has a wonderful articulation of the cycle of creativity and commoditization which aligns very well with some of your thinking … in fact, I wouldn’t be surprised if I discovered this through one of your tweets, but I figured I’d mention it here, just in case.

  4. Thanks for the comments Joe. You can tell that management studies is getting stagnant when a 3×3 matrix seems novel! 😀

    The point that even Google isn’t always Google is important. One of the key issues that I’m trying to address with this is dynamics & evolution – how firms move from place to place here over time. It’s true that there is a cycle at work, which must be managed.

    The Wardley post looks interesting. His site is down at the moment, but I’ll read it when I get a chance.

  5. I’m drawn to the unicorns box. Perhaps these are your one hit wonders, companies who create an innovative product but get overtaken easily. TiVo comes to mind.

  6. Hi Tim,
    I really like the way you’ve framed this. We’re always looking for new ways of talking about innovation and your matrix is a great framework. Can we quote you??

    • Thanks for the feedback Sue – I’m glad it is useful! Everything here is published under a Creative Commons license, so you can do whatever you want with it as long as I’m acknowledged.

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